Frankfurt. Now the Chancellor is getting involved. Friedrich Merz (CDU) recently personally met the two favorites for the next presidency of the European Central Bank (ECB) for job interviews: first the Dutchman Klaas Knot, then the Spaniard Pablo Hernández de Cos.
In doing so, Merz has made the most powerful office in the euro zone a top priority, as Handelsblatt learned from people familiar with the matter. It is one of numerous indications that the decision on the replacement of the ECB leadership is approaching - and at the same time on the future role of Germany.
It is becoming increasingly clear that the federal government has no claims of its own to the ECB presidency. In contrast to Knot and Hernández de Cos, Bundesbank President Joachim Nagel has not recently met the Chancellor for a relevant one-on-one discussion on the matter, according to information from Handelsblatt.
Nagel received the ECB Council in Berlin a few weeks ago for the foreign interest rate decision. Merz visited the central bankers at a gala dinner in the luxury restaurant Borchardt. But the Chancellor passed up the opportunity to meet with the head of the Bundesbank.
While previous federal governments have repeatedly tried in vain to install a German as ECB president, the black-red coalition appears not to even be trying. This is causing astonishment in central bank circles. There is talk of “self-dwarfism”.
In addition to Nagel, Isabel Schnabel also had confidence in the ECB presidency. But the incumbent ECB director had to realize that legal reservations in the federal government were blocking her path because a second term in office was not planned. Schnabel has therefore already looked for an alternative and signed with the International Monetary Fund (IMF).
Her move to Washington, revealed by Handelsblatt, has brought unexpected dynamics to the personnel puzzle at the ECB. Originally, the finance ministers of the euro zone were supposed to name candidates to succeed Schnabel by Wednesday. But the Eurogroup, led by Greece, has extended the application deadline by a month to November 27th.
The decisive factor is likely to be the overriding interest of the heads of state and government in finding a package solution for the ECB Executive Board. In total, three positions will be vacant for the foreseeable future: What is certain is that Schnabel will be leaving the ECB at the beginning of January. Chief economist Philip Lane is leaving when his term expires at the end of May. And hardly anyone believes that ECB President Christine Lagarde will last another full year.
Her term of office actually runs until the end of October 2027. However, she has repeatedly fueled speculation about an early departure. At the end of September, she confirmed for the first time that she was considering leaving the job “a few months” earlier.
There have recently been increasing indications that Lagarde could take over the leadership of the World Economic Forum. According to media reports, the Board of Trustees of the World Economic Forum could entrust the French woman with the management in November and thus soon create facts.
As head of the ECB, Lagarde is a regular guest at the World Economic Forum, which traditionally takes place in Davos in January. This time, Lagarde could appear in Switzerland in a double role - as the current ECB President and the designated host for the coming years.
Lagarde’s autobiography “Lady First” will also be published in January. The Frenchwoman has already announced that she will present the book at various events. This also fuels speculation that Lagarde has already finished being ECB President.
Merz and the heads of state and government of the euro zone do not want to wait for a clear announcement from Lagarde before they start looking for her successor. Every appointment to the Governing Council of the ECB follows a strict procedure. Among other things, nominees must appear at a hearing before the European Parliament. That takes time.
But the negotiations at the highest level behind the scenes are crucial. The arithmetic of power in the Governing Council of the ECB always depends on a balance between the northern and southern countries of the euro zone. The turbulence on the bond markets emanating from France is creating additional explosiveness in the crucial phase.
The different strengths of the candidates could also be the deciding factor: Knot is generally seen as a crisis manager with a penchant for high interest rates. Hernández de Cos has portrayed himself as more of a macroeconomist and advocate of looser monetary policy.
French President Emmanuel Macron apparently has the following deal in mind: Dutchman Knot will become ECB President if the French are allowed to send one of several high-profile candidates to the ECB as chief economist as a counterweight.
If the federal government supports Knot, it would probably have to make do with the markets department on the ECB board, as under Schnabel. Those who sympathize with this idea point to the great responsibility of this position: in the event of a euro crisis, the markets board would be responsible for coordinating new bond purchases, for example. However, if the ECB presidency went to the Spaniard Hernández de Cos, the Germans could claim the position of chief economist for themselves.
Within the government, the division of tasks for the crucial weeks is clearly divided: According to insiders, Finance Minister Lars Klingbeil (SPD) also used the annual meeting of the IMF and World Bank in Bangkok two weeks ago for discussions with Knot and Hernández de Cos. But in terms of personnel, the SPD man is responsible for Schnabel's successor and the Chancellery is responsible for the ECB presidency.
